17 October 2012

The Housing Board has unveiled the
next phase of development for Singapore's hottest new estate, Punggol, which is
also known for being the first eco-town.

Estimated to be twice the size of Ang
Mo Kio when it is complete, the eco-precinct is expected to boast seven new
districts for waterfront housing, as well as abundant greenery to soften its
projected high density.

Last night at the HDB Awards gala at
Marina Bay Sands, National Development Minister Khaw Boon Wan painted the next
phase of Punggol as part of the Government's plan to progressively raise the
standard of HDB living while catering to a growing population.

There are 26,400 completed HDB flats
in the area, and about 6,400 private homes which are in the works.

The total number of HDB flats and
private homes is projected to be 96,000 when development ends, which could
happen in the next 15 years or so, depending on demand and economic conditions.

The first two to be developed within
the next five years will be the Northshore and Matilda districts. The former
will boast the tallest residential buildings in the area - at 29 storeys, and
overlooking the Strait of Johor - while the latter will draw inspiration from
the rich history of the area such as the iconic Matilda House.

Other districts which will come on
stream later include Crescent, Punggol Point and Canal. Work at Waterway East
and Waterway West has already begun.

The town centre will be expanded into
a new "Punggol Downtown", which will have a waterfront market
village, a learning corridor which will house educational institutions, and a
creative cluster for commercial use relating to lifestyle needs.

Flora will also play a bigger role in
the nation's first eco-town. The existing waterway will be enhanced with green
spaces extending northwards. Coupled with the town centre, a new sports complex
and the learning corridor, this area will form the "green heart" of
the town.

"Green fingers" - or paths
lined with greenery - will extend from the "green heart" to reach the
coastal promenade and Coney Island, where a park is expected to be completed by
2014.

The 1.5km Old Punggol Road will be
one such "finger". It will be closed to traffic and converted to a
heritage trail for pedestrians.

Cycling tracks will also be built in
tandem with new roads to encourage a clean commute, while the Western LRT loop
is expected to start operations in tandem with development in the area.

An exhibition on the proposed plans
has been put up for public consultation at HDB Hub, starting today and continuing
until 28 October.

The fast-growing area of Punggol
could end up with a greater proportion of private homes than in other parts of
the country.

Private units average about 18 per
cent of the housing mix across the country but one expert tips that it could go
as high as 25 per cent in Punggol "as aspirations of people grow".

This would work out to about 24,000
private units given that Punggol is expected to host around 96,000 homes
eventually. Currently there are also just over 100 landed completed homes in
Punggol as of the second quarter, said the Urban Redevelopment Authority (URA).

But URA did not say how many more
private homes will be added to the mix eventually.

But all the new homes could add
stress to the infrastructure in the area, said Mr Lee Sze Teck, Dennis Wee Group's
senior manager of training, research and consultancy. "Higher than
estimated number of residential homes means added stress on the transportation
network," he noted, adding that the nearby expressways and the North-East
MRT Line "are already pushing the max capacity during peak hours".

Still, consultants said the
"waterfront living lifestyle" Punggol offers should prove a draw.

"This concept... coupled with
newer and better designed flats in Punggol, might lead to higher cash over
valuation (COV) being asked by sellers," Mr Lee said.

Another analyst added: "It's too
early to say but the future generation might like living here... This estate
will be much newer than say, Tampines."

The tender for a housing site in New
Upper Changi Road attracted 11 bids by the close yesterday, with Keppel Land
unit Sherwood Developments submitting the top bid of S$434.6 million, the Urban
Redevelopment Authority said.

Located within an established private
housing estate and close to Tanah Merah MRT Station, the 99-year leasehold site
has an area of 343,171 sq ft and a maximum gross floor area of 549,078 sq ft.

"When awarded the site ...
Keppel Land plans to develop about 700 homes ranging from 500 to 1,400 sq ft in
one- to four-bedroom configurations," said the developer, whose bid
translates to S$791 per sq ft per plot ratio.

Mr Lee Sze Teck, Senior Manager of
Training, Research and Consultancy at DWG, noted that Sherwood's bid was 7.1
per cent higher than the second best bid from Bayfront Land, a joint venture
between Fragrance Group and World Class Land.

The latter two won a tender for a
housing site in nearby Tanah Merah Kechil in August at S$676 psfppr, and the
higher prices bid for the New Upper Changi Road site underlined the confidence
of developers in the property market, he said.

The estimated breakeven is between
S$1,150 and S$1,200 psf, while the selling price could be in the range of
S$1,400 to S$1,450 psf, higher than the average selling price of S$1,300 to
S$1,400 psf at eCO at Bedok South, he added.

Minister for National Development
Khaw Boon Wan said there is no need for the Housing and Development Board (HDB)
to build executive maisonettes (EMs) again, as executive condominiums (ECs)
already include double-storey units similar to EMs.

HDB stopped building EMs in 1995,
when the EC Housing Scheme was rolled out.

EMs range from 138 to 243 square
metres in size while ECs range from 69 to 324 square metres.

Mr Khaw noted that ECs typically come
with more unique design features than EMs. He said the EC is better placed to
meet the diverse needs of Singaporeans, removing the need to re-introduce EMs.

National Development Minister Khaw
Boon Wan said home buyers are currently paying above the value assessed by
professional valuers as it is "a seller's market".

Mr Khaw said the basis of valuation
for all HDB flats are the same, whether they are resale flats transacted in the
open market, flats affected by Selective Enbloc Redevelopment Scheme (SERS), or
flats that are compulsorily acquired.

"Their values are assessed by a
panel of professional valuers, based on established valuation principles (which
comprise factors) such as location, size, storey height and the extent of renovations,"
said Mr Khaw.

According to Mr Khaw, HDB advises
buyers to think carefully before committing to a price which is substantially
above what the professional valuers have estimated.

"Resale prices are determined by
willing buyers and sellers; the government cannot intervene to determine the
transaction prices for buyers and sellers," Mr Khaw added. "We help
players make informed decisions through the timely release of pricing data via
the HDB website."

Singles are buying fewer Housing and
Development Board (HDB) resale flats in the recent four years.

Between 2007 and 2011, singles bought
an average of 4,300 units a year. That is down from a yearly average of 5,600
between 2002 and 2006.

The ministry also said three-room
units are the most popular flat type among singles. The trend holds true even
after the rule was eased in 2004 for singles to buy any flat type, rather than
three-room or smaller units on the resale market.

But the authorities say the
proportion of singles buying four-room and five-room flats has increased.

The Urban Redevelopment Authority
(URA) could be looking to discourage an over-concentration of small strata
shops in new developments, Business Times (BT) understands. It is also trying
to steer them towards a certain size mix.

BT understands that URA is
recommending that at least 50 per cent of the retail portion in a development
should comprise units of at least 60 sq m (645.83 sq ft) each. A maximum 40 per
cent may be allocated to 25-59 sq m units, and no more than 10 per cent to
15-24 sq m units. It seems URA is discouraging units below 15 sq m (161.46 sq
ft).

When contacted, URA declined to
confirm the recommended unit size mix. But its spokeswoman, while acknowledging
the need for flexibility to cater to diversity of business needs of different
market segments, added: "A development consisting predominantly of small
units may pose problems, for example, carpark shortage and traffic congestion,
to the local area."

An analyst suggests that a key reason
for URA's advice on strata unit-size mix could be to keep a lid on investment
demand for strata shops, which have been fetching eye-popping prices.

Some developers have taken to minting
smallish shops to keep lump-sum prices affordable to potential buyers, but in
the process, setting high per sq ft (psf) prices. For example, earlier this
year, eight street-level cafe units ranging from 398 sq ft to 807 sq ft at
Oxley Tower at Robinson Road were sold at $6,200-$7,200 per sq ft. At the
nearby EON Shenton, all 23 street-level shops fetched $4,000-$4,980 psf. The
shops are 129 sq ft to 377 sq ft.

A common perception in industry
circles is that for office units, URA is leaning towards 100 sq m as either a
minimum or average unit size.

URA's spokeswoman noted that businesses
have very diverse needs and budgets. "Some small commercial and retail
units exist in the market today to cater to businesses that do not require a
big space... When evaluating commercial development proposals, we take into
consideration the planning intention for the area and the potential impact on
the surrounding environment and local traffic conditions.

DWG senior manager Lee Sze Teck
highlights that a mixed development, Suites at Bukit Timah, has a shop unit as
small as 5 sq m based on caveats data. "If there are too many small shop
units being built, it begs the question whether ultimately all these units can
be rented out. If tenants find them too small, they could be left empty - a wastage
of resources. Of course, potential operators could source for a few adjacent
units and combine them into a larger space."

Another analyst said some owners may
end up using their tiny retail units for storage if they can't find retail
tenants. "An aggregation of small units in a mall could also lead to an
unusual mix of operators, like massage outlets, nail salons, 4D booths and
others, which could dilute the original intention of the planners for the
site," he added.

Figures released by the government Tuesday
showed that there is no speculative element in the prices of HDB shophouses
given the low percentage of resale transactions.

Minister for National Development
(MND) Khaw Boon Wan highlighted that resale transactions involving HDB-sold
shops made up only 3 to 7 per cent of the total stock of HDB-sold shops.

From January to August 2012, there
were 216 such transactions and of these, 14 shops, or 6 per cent, were resold
within one year of purchase.

Given the fact that HDB- sold shops
are transacted in the market on a willing- buyer-willing-seller basis, without
restrictions and in accordance with demand, Mr Khaw said that MND will not be
imposing new restrictions such as stricter citizenship eligibility on
transactions.

There are currently 8,700 HDB-sold
shops. Singaporeans and Singapore-owned companies own about 95 per cent of the
sold shops. The remaining 5 per cent are owned by permanent residents (PRs),
foreigners and foreign- owned companies.